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Wednesday, August 31, 2016

Andrew Peller Ltd

Sound bite for Twitter and StockTwits is: Relatively Expensive. It has had a big run up lately. It would seem that the growth expected due to Ontario law changes has already happened for the stock price. Perhaps it is too late to buy? See my spreadsheet on Andrew Peller Ltd.

I do not own this stock of Andrew Peller Ltd. (TSX-ADW.A, OTC-ADWPF), but I used to. This stock was on Mike Higgs' dividend growth stock list. I owned this stock as Andres Wines Ltd between 1996 and 2000.

The first thing I noticed is that the stock price has almost doubled since last year when it was around $17.90 and it now around $30.50. This stock has never had such a run up in price before. Groceries stores will be able to stock Ontario wines starting this fall. The Ontario government is going to increase access to wines. This is about time they did this. This is probably the reason that this company has been hitting all-time highs. I certainly missed this great opportunity.

Until recently dividends were moderate with moderate growth. The current dividend is 1.61%. This is an historical low and this implies that the stock price is high. The 5 year median dividend yield is 3.04% and the historical median dividend yield is 3.58%. Dividends have grown at 4.9% and 6.9% per year over the past 5 and 10 years. The last dividend increase was for 16.7% and occurred in 2016.

I have dividend information going back 26 years. Dividends were fairly flat until 2007 when they started to increase their dividends. Increases have not been for every year but dividends have not decreased either.

If you had bought this stock 5, 10 or 15 years ago, the dividends paid would have covered 21%, 35% and 105% of the stock's purchase price. If you had bought this stock 5, 10 or 15 years ago your dividend yield on your original purchase price would be 4.8%, 4.5% or 10.3%.

The Dividend Payout Ratios has generally been good. The DPR for EPS for 2016 is 30% and for CFPS 16%. They can afford their dividends. Note that the end of their financial year is the end of March each year, so the current financial year I am dealing with is March 31, 2016.

This stock's capital gain over the past 5 years is at 26.8%. Over the past 5 years Revenue is up by 4.75, EPS is up by 13% and Cash Flow is up by 5.5%. The Dividend yield is at an all-time low. What this all points to, is that the market expects future great growth for this company.

The 5 year low, median and high median Price/Earnings per Share Ratios are 11.09, 12.71 and 14.26. The corresponding 10 year values are 10.52, 11.98 and 12.01. The historical values are 10.58, 12.71 and 14.26. The current P/E Ratio is 19.81 based on 2016 EPS for the 12 months to the end of the second quarter of $1.54 and a stock price of $30.50 Considering the big stock price run up lately, this P/E is not that high. However, this testing points to the stock price being relatively expensive.

I get a Graham Price of $19.98. The 10 year low, median and high median Price/Graham Price Ratios are 0.71, 0.87 and 0.99. The current P/GP Ratio is 1.53 based on a stock price of $30.50. This stock price testing suggests that the stock price is relatively expensive.

I get a 10 year median Price/Book Value per Share Ratio of 1.35. The current P/B Ratio is 2.63 based on BVPS of $11.52 and a stock price of $30.50. The current ratio is some 93% above the 10 year median ratio. This stock price testing suggests that the stock price is relatively expensive.

I get an historical low dividend yield of 2.07%. The current dividend yield of 1.61% is based on dividends of $0.49 and a stock price of $30.50. This is some 22% lower than this historical low. This certainly suggests that the stock price is relatively expensive.

I cannot find any analyst that follows this stock.

In this August Press Release on Market Wired the company is recommending a 3 to 1 stock split. Ryan Modesto in a report earlier this year on G&M talked about Ontario government looking to increase access to wines and spirits with this company benefiting from this. Allison McNeely of the Ontario Region The Record has written a good report on changes to Ontario laws regarding wines.

I will have only one entry for this stock this year. However, I did a more complete report on this company in 2015 and you can see that report here.

The last stock I wrote about was about was Superior Plus Corp. (TSX-SPB, OTC-SUUIF)... learn more . The next stock I will write about will be Badger Daylighting Ltd. (TSX-BAD, OTC- BADFF)... learn more on Friday, September 2, 2016 around 5 pm. Tomorrow on my other blog I will write about the TTC Budget ... learn more on Thursday, September 2, 2016 around 5 pm.

Andrew Peller Limited is a leading producer and marketer of quality wines in Canada. With wineries in British Columbia, Ontario and Nova Scotia, the Company markets wines produced
from grapes grown in Ontario's Niagara Peninsula, British Columbia's Okanagan and Similkameen Valleys and vineyards around the world. They also market craft beer under the Granville Island brand. The Company produces and markets consumer-made wine kit products through Winexpert and Vineco International Products. The Company's products are sold predominantly in Canada. Class A shares are non-voting. Its web site is here Andrew Peller Ltd.

This blog is meant for educational purposes only, and is not to provide investment advice. Before making any investment decision, you should always do your own research or consult an investment professional. I do research for my own edification and I am willing to share. I write what I think and I may or may not be correct.

About Me

I haven’t had a main stream job since 1999.
To do this was a two prong attack of controlling spending and earning income.
I exercise, then run each day before breakfast. I read in the morning, then I go to Starbucks for coffee. I work on my computer in the afternoon. Follow me on twitter at http://twitter.com/spbrunner.